U.S. Rep. Jaime Herrera Beutler said Tuesday she’ll sign on as a co-sponsor to a bill to ban insider trading by members of Congress — two days after efforts to pass a similar bill by her predecessor, former U.S. Rep. Brian Baird, were featured on CBS TV’s “60 Minutes.”
“Brian Baird deserves a lot of credit for highlighting this needed reform — both as a member of Congress, and recently as a regular citizen,” Herrera Beutler, R-Camas, said in a statement. “There’s no place for insider trading in this country — not on Wall Street, and most certainly not in Congress. We’ve all seen the fallout when folks in privileged positions put their own profit above ethics. I hope we pass this bill to ensure Congress keeps its focus on serving the public good.”
In a Tuesday editorial, The Columbian called on Herrera Beutler and other members of Congress to follow Baird’s example and “police themselves in the same way they police their constituents” when it comes to profiting from insider knowledge.
Baird said he was pleased at the news. “I’m glad it’s gotten some attention at last, and I think it would behoove leadership to just bring it up and pass it,” he said in a phone interview. “It’s already had a hearing several years ago. We’re not asking anything in the bill that we don’t ask of the general public.”
The current version of the STOCK (Stop Trading on Congressional Knowledge) Act was introduced March 17 by Rep. Timothy Walz, D-Minn., referred to a series of House committees, and reintroduced June 1. The bill has not received a hearing since shortly after Baird introduced it in 2006.
As of Tuesday, the measure had 19 co-sponsors from both parties, not including Herrera Beutler. Of those, 11 signed on Monday after the “60 Minutes” piece aired. Reps. Earl Blumenauer, D-Ore., and Dennis Kucinich, D-Ohio, are among those who signed on as co-sponsors in June.
The STOCK Act is modeled on a bill of the same name that Baird co-sponsored with Rep. Louise Slaughter, D-N.Y., in March 2006. It would prohibit members of Congress, their employees and executive branch staff members from profiting from nonpublic information they obtain through their positions.
“Members and staffers should be concerned first and foremost with serving the American people and not with fattening their stock portfolios on the taxpayer’s dime,” Baird said when he introduced the bill in 2006. “Increasingly common midnight votes . . . are the perfect recipe for trading abuse; a few select staffers and members have access to information that could bring them a windfall as soon as the markets open.”
The measure drew only a handful of sponsors and had one sparsely attended hearing in 2006.
Under the bill, members of Congress and congressional and executive staff members would be prohibited from buying or selling securities, swaps or commodity futures based on nonpublic information they obtain through their jobs; prohibited from sharing nonpublic information about legislative actions for purposes of investing or profiting from investments; and be required to report investment transactions valued in excess of $1,000. Transactions involving blind trusts and mutual funds would be excluded.
The bill also requires agencies specializing in political intelligence that get information directly from Congress to register with the House and Senate, similar to lobbying organizations.
Baird, a Democrat who served six terms representing Southwest Washington’s 3rd District, said Walz agreed to co-sponsor the reform bill with Slaughter after he left office in January.
The legislation was prompted in part by the insider trading scandal involving former House Majority Leader Tom DeLay and lobbyist Jack Abramoff in 1999 and 2000.
In researching the issue at the time, Baird learned that political intelligence firms marketing insider knowledge had operated in the nation’s capital since the 1970s but remained relatively unknown because they were not required to register their clients or report their earnings.
The issue is as timely as ever, Baird said Tuesday.
“This really should not be a partisan issue,” he said. “The solution should cross the aisle as well.”
Compromises were made in the original STOCK Act, Baird said. For example, it gives members of Congress and legislative and executive staff members 90 days to report the purchase, sale or exchange of stocks and bonds to the Securities and Exchange Commission.
“Corporate executives and hedge fund managers must report within 45 days of making a trade,” he said. “I thought the same thing should apply to us. Some people thought the 90-day reporting requirement would make the bill more appealing.” But in fact, he said, “it didn’t buy us any support.”
Asked when he’d like to see Congress vote on the revived bill, Baird had a quick answer: “I would urge them to bring it up 72 hours from now.”
That’s in keeping with his long-standing campaign to give members of Congress 72 hours to read a bill before they vote on it.
It makes sense in this case, Baird said, “because the value of insider information is less valuable when people have had time to read the bill.”
Baird lives with his wife and twin sons in Edmonds, north of Seattle, and works for a ship repair company as vice president for governmental affairs. He said he has “no plan” to run for U.S. Rep. Jay Inslee’s seat in Congress next year. Inslee is leaving Congress to run for governor.
Kathie Durbin: 360-735-4523 or firstname.lastname@example.org.